zippy1 Posted December 26, 2012 Share Posted December 26, 2012 The PREC14A is out http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg2MjQ0NzkmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d Link to comment Share on other sites More sharing options...
zippy1 Posted December 26, 2012 Share Posted December 26, 2012 The PREC14A is out http://investors.sandridgeenergy.com/phoenix.zhtml?c=196066&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTg2MjQ0NzkmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d From PREC14A, page 29, page 30 and page 31, I just noticed that on the day of Dec. 10th, TPG actually sold 1.6 million share in total after the stock price rose. I wonder whether this means that they were just agitating to unload or they already had enough votes? Link to comment Share on other sites More sharing options...
bmichaud Posted December 26, 2012 Share Posted December 26, 2012 Assuming 490mm total shares out and TPG's 6.5% ownership, TPG owns ~32mm shares - so a 1.6mm sale is around 5% of their stake and 33bps of total SD s/o.... Link to comment Share on other sites More sharing options...
rogermunibond Posted December 27, 2012 Share Posted December 27, 2012 http://www.sec.gov/Archives/edgar/data/1349436/000090266412001616/p12-1980sc13da.htm New SC 13D/A filed by TPG. 33 million shares 6.7% Link to comment Share on other sites More sharing options...
fareastwarriors Posted December 27, 2012 Share Posted December 27, 2012 http://dealbook.nytimes.com/2012/12/26/hedge-fund-seeks-ouster-of-sandridge-energys-board/ Hedge Fund Seeks Ouster of SandRidge Energy’s Board A New York hedge fund filed papers with federal securities regulators on Wednesday seeking to oust the board at SandRidge Energy, the latest salvo in its continuing campaign against the struggling Oklahoma City oil and gas company. The hedge fund, TPG-Axon Capital Management, which owns nearly 7 percent of SandRidge’s shares, submitted so-called consent solicitation documents with the Securities and Exchange Commission, offering up its own slate of directors to replace the current board. SandRidge has come under pressure by TPG-Axon and another large hedge fund, Mount Kellett Capital Management, which have attacked the company over what they called an onerous debt load, reckless spending and incoherent business strategy. TPG-Axon’s securities filing came two days after it sent a blistering letter to SandRidge’s board, demanding that it investigate whether Tom L. Ward, SandRidge’s chief executive, and his son had engaged in self-dealing and had directly competed with the company. “It is our understanding that Mr. Ward and his son, Trent Ward, actively compete with the company, and in addition, have also engaged in repeated transactions in which they ‘front-run’ the company,” Dinakar Singh, chief executive of TPG-Axon, wrote in the letter. “It is astonishing that the C.E.O. of a company would engage in behavior that directly competes with his shareholders’ interests for his own personal benefit.” The letter accuses the Wards of acquiring mineral rights and then leasing those rights to SandRidge for a profit. In securities filings this year, SandRidge said it had bought interests in mineral rights from an entity owned by Ward family trusts. A spokesman for SandRidge, Greg Dewey, did not return telephone calls seeking comment. SandRidge’s shares are down more than 75 percent since its 2007 initial public offering and more than 90 percent since its peak in June 2008. The stock was flat in Wednesday’s session, closing at $6.26. TPG-Axon’s S.E.C. filing was made in conjunction with a lawsuit filed on Monday in the Delaware Court of Chancery. The lawsuit challenges a move by SandRidge to shorten the time that shareholders have to vote on changing the company’s bylaws and replacing the board with TPG-Axon’s slate. “Sadly, we are not surprised that Tom Ward and the board of directors have resorted to shameful tricks to try and confuse shareholders and shorten the period of time in which they have to vote,” Mr. Singh said in a statement. “The actions Tom and the board have taken over the past several weeks reek of desperation and clearly illustrate their complete disregard for shareholder interests and transparency.” The solicitation by TPG-Axon will be sent in early January to SandRidge shareholders, who would then have up to 60 days to consent to the fund’s proposal to elect a new board, which would include Mr. Singh. Much of TPG-Axon’s criticism has been aimed at Mr. Ward. Mr. Ward started SandRidge in 2006 after leaving Chesapeake Energy, a much larger Oklahoma oil-and-gas concern that he co-founded and has had its own share of corporate governance issues in recent years. He is a part-owner of the Oklahoma City Thunder professional basketball franchise along with Aubrey McClendon, a co-founder of Chesapeake and its chief executive. Mr. Ward’s total compensation in 2011 was $25 million, representing about half of the company’s earnings that year. SandRidge bestows numerous perks upon Mr. Ward, including the unlimited use of the company’s four corporate jets. Link to comment Share on other sites More sharing options...
gordoffh Posted December 27, 2012 Share Posted December 27, 2012 Yahoo board saying that Fairfax bought approx 5mil shares of Sd dec 21 at around 6 .21 . Trying to find a release but can,t. Anybody else see this? Link to comment Share on other sites More sharing options...
Myth465 Posted December 27, 2012 Share Posted December 27, 2012 http://www.sec.gov/Archives/edgar/data/915191/000118143112067258/xslF345X03/rrd364793.xml As I said SD is in play, something is going on behind the scenes. My guess is Ward will sell to a friendly party. Link to comment Share on other sites More sharing options...
gordoffh Posted December 27, 2012 Share Posted December 27, 2012 Thanks. I had a sell in that got filled late in the afternoon. Have been flipping a small portion of shares lately to take part in the volatility. Still have a boatload with average around the high 7's. This was purchase was nice to see. Link to comment Share on other sites More sharing options...
Zorrofan Posted December 27, 2012 Share Posted December 27, 2012 Thanks. I had a sell in that got filled late in the afternoon. Have been flipping a small portion of shares lately to take part in the volatility. Still have a boatload with average around the high 7's. This was purchase was nice to see. Myth - are you suggesting FFH will take control of SD? Interesting thought.... cheers Zorro Link to comment Share on other sites More sharing options...
zippy1 Posted December 27, 2012 Share Posted December 27, 2012 Sandridge management now files their own 14A http://phx.corporate-ir.net/phoenix.zhtml?c=196066&p=IROL-secToc&TOC=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9vdXRsaW5lLnhtbD9yZXBvPXRlbmsmaXBhZ2U9ODYyODExNQ%3d%3d&ListAll=1 The compensation does look out of whack; when compared to what the management did for (or to) the shareholders. Link to comment Share on other sites More sharing options...
gordoffh Posted December 27, 2012 Share Posted December 27, 2012 What a story, wonder if Prem knows about this. A comment in an earlier post re TPG' s allegations with respect to Ward's management of SD. I assume from today,s report of additional buying that if they are they are not concerned. Link to comment Share on other sites More sharing options...
Myth465 Posted December 27, 2012 Share Posted December 27, 2012 Personally I am happy there was a margin of safety. Between the miss IRR going down to mid 40s from mid 80s due to more gas and less oil, the Permian being sold for a bit less than PV10, the DOR purchase at PV10, lawsuits, and the letters regarding high G&A, front running, and other improprieties I am starting to worry about a return of capital and not a return on capital While Prem is paid to wait, he has to be wondering as well. I dont think he will take over SD, but cant see why he would stick with Ward when he would never do these things to his shareholders. I dont see how one reads the 3 letters, and then reads SD's response, and still votes for current management. Cost of capital, G&A, and inefficiencies matter when IRRs are going down and are in the 30 - 40 range. I dont see how Ward wins this, and I believe he could actually be terminated with cause which takes away the change of control payoff. If I were him I would be talking to lawyers, and would be looking for a buyer around $9 - $11. Its a big windfall for him, worth at least $100 million in pay / stock. Its under his basis, but its that or get kicked out, embarrassed, and get nothing if they can figure out a way to terminate you with cause. The miss has value for any oil and gas company with scale and a low cost of capital. But it cant cover up for all of the issues at SD. I dont know if SD can drill it properly with the G&A and cost of capital. The CHK model of overspending is broken. Its getting to the point where its in everyones best interest for the company to be sold at $10 a share. That would be a decent windfall for me to compensate for the all the headaches this investment has caused lol. Link to comment Share on other sites More sharing options...
fareastwarriors Posted December 27, 2012 Share Posted December 27, 2012 bb screen Link to comment Share on other sites More sharing options...
zippy1 Posted December 28, 2012 Share Posted December 28, 2012 bb screen I presume Prem will vote with Tom Ward while TPG will vote against. What about the other big buyer? Hopefully, this will get the cost structure of SD to be reasonable. Link to comment Share on other sites More sharing options...
muscleman Posted December 29, 2012 Share Posted December 29, 2012 Personally I am happy there was a margin of safety. Between the miss IRR going down to mid 40s from mid 80s due to more gas and less oil, the Permian being sold for a bit less than PV10, the DOR purchase at PV10, lawsuits, and the letters regarding high G&A, front running, and other improprieties I am starting to worry about a return of capital and not a return on capital While Prem is paid to wait, he has to be wondering as well. I dont think he will take over SD, but cant see why he would stick with Ward when he would never do these things to his shareholders. I dont see how one reads the 3 letters, and then reads SD's response, and still votes for current management. Cost of capital, G&A, and inefficiencies matter when IRRs are going down and are in the 30 - 40 range. I dont see how Ward wins this, and I believe he could actually be terminated with cause which takes away the change of control payoff. If I were him I would be talking to lawyers, and would be looking for a buyer around $9 - $11. Its a big windfall for him, worth at least $100 million in pay / stock. Its under his basis, but its that or get kicked out, embarrassed, and get nothing if they can figure out a way to terminate you with cause. The miss has value for any oil and gas company with scale and a low cost of capital. But it cant cover up for all of the issues at SD. I dont know if SD can drill it properly with the G&A and cost of capital. The CHK model of overspending is broken. Its getting to the point where its in everyones best interest for the company to be sold at $10 a share. That would be a decent windfall for me to compensate for the all the headaches this investment has caused lol. I am a bit confused about the suit that TPG brought to SD. SD wants to set the solicitation deadline to be the 19th but TPG said it should be 60 days. So whose word would count in this case for the solicitation? Link to comment Share on other sites More sharing options...
gordoffh Posted December 31, 2012 Share Posted December 31, 2012 Yahoo board is saying Fairfax bought additional 3.7 million shares dec 27/31. Getting interesting if true Link to comment Share on other sites More sharing options...
bmichaud Posted January 1, 2013 Share Posted January 1, 2013 The Fairfax/SD situation reeks of LUK and JEF. Why not take SD private along with TW? The market cap is peanuts for Fairfax. Certainly would explain recent share purchases.... Link to comment Share on other sites More sharing options...
plato1976 Posted January 1, 2013 Share Posted January 1, 2013 Take SD private with TW and continue to pay TW at the current rate ? Not a good idea to me as an FFH shareholder :( The Fairfax/SD situation reeks of LUK and JEF. Why not take SD private along with TW? The market cap is peanuts for Fairfax. Certainly would explain recent share purchases.... Link to comment Share on other sites More sharing options...
alertmeipp Posted January 1, 2013 Share Posted January 1, 2013 Yahoo board is saying Fairfax bought additional 3.7 million shares dec 27/31. Getting interesting if true Yes, they did. Not sure what it means as these transactions are after Dec 13.. Link to comment Share on other sites More sharing options...
benhacker Posted January 1, 2013 Share Posted January 1, 2013 The Fairfax/SD situation reeks of LUK and JEF. BM, can you clarify what you mean here? How are these situations similar? Betting on a high paid jockey (?) or something else? Ben Link to comment Share on other sites More sharing options...
ourkid8 Posted January 1, 2013 Share Posted January 1, 2013 Would you please help me understand how the Market Cap for SD is peanuts? You have a company with an enterprise value of $6.6B (Once you subtract the permian assets - $2.6B) you are looking at a company with an enterprise value of $4.5-5B. The market cap is peanuts for Fairfax. Certainly would explain recent share purchases.... Link to comment Share on other sites More sharing options...
bmichaud Posted January 1, 2013 Share Posted January 1, 2013 The Fairfax/SD situation reeks of LUK and JEF. BM, can you clarify what you mean here? How are these situations similar? Betting on a high paid jockey (?) or something else? Ben LUK had been a long time shareholder/supporter of JEF before eventually taking it private. My guess is that Fairfax was well aware of the shenanigans going on at SD (how could they not? Tey are a deep-dive firm) and was fine given how much they liked TW. As such, I assume they would prefer to allow TW to run SD under a private umbrella in order to A) avoid quarterly market scrutiny and B) provide cheaper financing. FFH building its stake at these levels makes a takeover that much more attractive as it won't need to tender for shares already owned. Link to comment Share on other sites More sharing options...
bmichaud Posted January 1, 2013 Share Posted January 1, 2013 Would you please help me understand how the Market Cap for SD is peanuts? You have a company with an enterprise value of $6.6B (Once you subtract the permian assets - $2.6B) you are looking at a company with an enterprise value of $4.5-5B. The market cap is peanuts for Fairfax. Certainly would explain recent share purchases.... FFH owns approximately 10% of shares out and TW owns 5%. If they did a joint going private transaction at $10 per share, FFH would pay $4.19B to the remaining 85%. FFH had ~$23B of cash and investments as of the latest quarter end - a SD takeout would be less than 20% of that total. Throw in some stock and debt issuance, I think the takeout would be peanuts, especially considering FFH likely sees SD worth over $20 in five years with a world-class operator such as Ward. Link to comment Share on other sites More sharing options...
alertmeipp Posted January 1, 2013 Share Posted January 1, 2013 I think the question to ask is why FFH was able to buy such last amount without pushing up the pps. Some heavy holders are selling out. Link to comment Share on other sites More sharing options...
Myth465 Posted January 1, 2013 Share Posted January 1, 2013 I think the question to ask is why FFH was able to buy such last amount without pushing up the pps. Some heavy holders are selling out. I dont see how this matters, you have dumb money selling to smart money. At the end of the day Prem knows 100% how this will play out. He is the one to watch, the one with all the cards. Link to comment Share on other sites More sharing options...
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